Why is it important that a firm have different groups of consumers with different demand elasticities if it wishes to engage in price discrimination?
What will be an ideal response?
Price discrimination works because a firm charges higher prices to individuals with a relatively more inelastic demand and lower prices to those with a relatively more elastic demand. If all consumers have the same elasticity of demand then charging different prices to different groups of consumers will not yield a higher profit to the firm.
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The money supply is controlled by the
A) New York Stock Exchange. B) Federal Reserve System. C) stock of gold in the economy. D) President of the United States.
In developed industries, the interest rate tends to be lower than in newer industries. What could explain this?
A) greater demand for loans in the developed industry B) greater supply for loans in the new industry C) greater demand for loans in the new industry D) lower supply for loans in the developed industry